Rice--Baylor Merger Update

Just like the merger of Lex Luthor and Braniac, the Rice-Baylor merger is experiencing its own set of difficulties.

Rice University President David Leebron announced last November that a proposed merger with Baylor College of Medicine would be resolved one way or another by May, but a spokeswoman suggested this week that the two institutions still aren’t close to an agreement.

The acknowledgement followed an internal Baylor update that it has reduced its $85 million deficit by $30 million and Rice faculty agitating for more input into what they note is the most important decision in the institution’s history.

That latter bit seems like it should make the merger easier. Although if Baylor improves its situation financially, while it makes Baylor more attractive to Rice, it may also make Baylor more reluctant to enter a deal (certainly they would be in the position to demand more concessions.)

Baylor’s shaky finances and uncertainty about its hospital, however, are considered stumbling blocks to a deal. Baylor hopes to trim an additional $35 million by next June, taking its deficit down to $20 million, interim President William Butler recently told faculty. Baylor also is trying to figure out a home for its doctors who practiced at The Methodist Hospital or St. Luke’s Episcopal Hospital before Baylor split from both.

“In visiting with Rice, there are two areas of concern,” Baylor Trustee Bob McNair said at a faculty meeting in February, an executive summary from which recently began circulating outside the institution. “One area has been that operating losses have been growing. The other was: What are we going to do with the hospital project?”

Baylor’s hospital project, a 250-bed facility near the veterans hospital, was much touted after the splits with Methodist and St. Luke’s but more recently became saddled with debt. In March, Baylor announced it would suspend construction of the hospital, a move Butler said would buy time to acquire more capital before continuing. Some sources said the delay would also allow the school to sell the building.

To me, it seems like having a hospital is necessary, and since there is one halfway built, it should be finished--assuming money can be found. Of course, Methodist and St. Luke's, having been burned by Baylor, might be more willing to negotiate with Rice.

At Rice, concern that the case hasn’t yet been made for a merger prompted faculty to meet in April. More than 200 professors turned out for the single-issue gathering, a rare event at the usually placid university. The meeting was closed, but Rice’s Faculty Senate posted minutes from the meeting on its Web site.

“The famous astronomer Carl Sagan once said, ‘Big claims require big proofs,’ ” computational engineering professor Moshe Vardi wrote in a letter also posted on the Web site. “The claim that the potential benefits of merging Rice with Baylor outweigh the risks is a ‘big claim’; it requires a ‘big proof.’ ”

Vardi wrote that he is skeptical about the merger and has encountered that sentiment among colleagues.

Professors who attended the meeting, however, said faculty opinions are all over the map, often coinciding with whether that professor’s discipline would stand to benefit from Rice having a medical school.

Faculty overwhelmingly adopted a resolution creating a faculty merger committee larger than the one appointed by Leebron and chaired by a professor instead of the president. Leebron accepted the resolution.

The committee is expected to bring to another meeting of the faculty in early fall a report on the potential benefits, costs and risks of the proposed merger and actions that could be taken to maximize the opportunities and minimize the risks.

This, I think, is the important part of this story. Seen from the outside, it seems like there is resistence to Lebron's eternally expansive approach to Rice.

Under Leebron’s leadership, the Rice campus is undergoing some $850 million in construction projects to add two new residential colleges to house a 30 percent growth in the undergraduate student body, a 10-story research center to deepen Rice’s collaboration with the Texas Medical Center and new campus amenities including a library-based pavilion and sports arena.

Perhaps they see Lebron as a reckless empire builder. Without knowing everything of the pitfalls of the merger, however, I support it. It would help Rice compete against the Ivies. Rice adding Baylor would balance William Pierce. The danger of increasing the size of the student body, as Lebron is doing, is that it might require Rice to become less selective. But adding an already very selective institution doesn't hurt Rice's reputation for selectivity. (For the same reason, I would oppose Rice buying the South Texas College of Law, which is more a meat-and-potatoes law school. South Texas College of Law is considered a 4th tier school and is unranked by U.S. News, while Baylor is ranked the 17th best research medical school by U.S. News and 17th best for primary care as well.)